YEAR-ON-YEAR house price growth slowed to 0.6 per cent over the course of May, according to the latest data released by mortgage lender Nationwide, meaning that the annual rate of house price growth has remained below 1 per cent for the sixth month in a row.

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Property UK: Annual house price growth remains below 1 per cent for the sixth month in a row

While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months.

The Nationwide report also highlights that first time buyer numbers have continued their steady recovery in recent quarters, reaching 359,000 in the twelve months to March, which is just 10 per cent below the 2006 peak. This is potentially due to first time buyers being aided to a degree by low borrowing costs, even though house prices remain high relative to average incomes.

That’s because the cost of servicing a typical mortgage as a share of take home pay has remained close to or below long run averages in most parts of the country.

However, Robert Gardener adds, “The main exception is in London, where a period of rapid house price growth in the three years to 2015 means that monthly mortgage payments would also be unaffordable for a large proportion of the local population. Reflecting the trend in overall house prices, the deposit challenge is most daunting in the South of England, where it would take an average earner a decade or more to amass a 20 per cent deposit.”

Against that backdrop, it’s possible to suggest that the currently subdued rate of average house price growth is actually a positive, if it means that more young people have the chance to get their foot on the property ladder and property values don’t spin completely out of control.

Property UK: Annual house price growth remains below 1 per cent for the sixth month in a row (Image: GETTY)

Property UK: Prices fell 0.2 per cent on average on a month-on-month basis (Image: GETTY)

Gareth Lewis, commercial director of property lender MT Finance, agrees: “The growing number of first time buyers entering the market is a positive trend as it is a stimulus for onward purchases and sales. The cost of mortgages at higher loan-to-values has fallen, which is ideal for those wanting to purchase their property sooner, rather than building up a larger deposit which can take considerable time. If the mortgage isn’t going to cost that much more, why wait?”

Gareth adds, “One would have thought first-time buyers would be the most hesitant of all purchasers because they have no experience of buying property but encouragingly, they are getting on and doing it regardless of what is going on at a political level.”

However, Jeremy Leaf, former RICS residential chairman, argues that today’s data doesn’t really provide us with a clear picture of what’s going on in the market saying: “Once again, we see no real pattern for the housing market emerging. One month prices, transactions or mortgage approvals are up, then down or very little movement, the next.

"The good news for us at the sharp end is that there is no major correction being seen or expected for the time being at least, despite some predictions to the contrary.”

Jeremy concludes, “However, the recent EU parliamentary elections demonstrate the country is still massively divided about Brexit just as the property market is split about how to remove the uncertainty it has created.”

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Property UK: Average UK property is now worth £214,946 compared to £213,618 in May 2018 (Image: GETTY)

The main advice for those transacting in the current market is to be cautious around pricing.

For those who are selling property at the moment, particularly in regions where demand is strong and prices have increased significantly over the past twelve months, it pays to remember that if your buyer needs a mortgage to fund their purchase, the property will need to be valued by a surveyor.

In order to do so, they will need to carefully study comparable local properties to ensure that the agreed sales price can be supported by other sales prices in the area.

Down valuations, the industry term used when a surveyor doesn’t think that the property is worth the agreed selling price, are on the increase as valuers remain cautious.

In these situations, lenders generally will only agree to advance what the valuing surveyor believes the property is worth, resulting in the buyer normally having to reduce their initial offer in order to proceed with the purchase.

That’s why, even though you may be selling in a buoyant local market, it pays to be realistic rather than ambitious in your marketing price.